Mobile Phone Network Operators React to WiFi Threat
By Gene J. Koprowski
TechNewsWorld
09/09/06 1:30 AM PT
"From a strategic and financial standpoint, the routing of traffic
through the IP network significantly enhances network quality and
capacity, and reduces the OPEX (operational expenditures) that carriers
expend on backhaul," noted ABI Research analyst Stuart Carlaw.
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Mobile phone network operators are responding to the competitive threat
of free WiFi Latest News about WiFi, progressively adding new
technologies to their networks to improve the wireless coverage they
offer, according to new research.
Small cellular base stations designed for use in residential or
corporate environments, called femtocells, are being adopted by
operators with "great enthusiasm" out of fear of free WiFi offerings.
Network providers believe the technology will increase network
efficiency and reduce loss of customers. It will also improve
in-building wireless service, and give them the ability to build
platforms upon which fixed-mobile convergence services can be realized.
Many Benefits
"Femtocells offer many benefits to operators," said Stuart Carlaw, an
analyst with ABI Research Latest News about ABI Research.
In just four years there will be 102 million users of femtocell products
on 32 million access points worldwide, according to a new study from ABI
Research.
"From a strategic and financial standpoint, the routing of traffic
through the IP network significantly enhances network quality and
capacity, and reduces the OPEX (operational expenditures) that carriers
expend on backhaul," noted Carlaw. "On a conceptual basis, femtocells
allow carriers to aggressively price cellular data services in the home,
with the ultimate goal of shaping consumer behavior."
From a technological standpoint, better in-building coverage for
technologies such as WCDMA and HSDPA is an incredibly important aspect
of service delivery for wireless carriers, explained Carlaw.
"The most interesting characteristic of femtocells is that they can form
the basis of a viable option for realizing converged fixed-mobile
services," he added. "They give operators a cost-effective way to
support fixed-mobile substitution, as well as a platform in the home
upon which additional features such as WiFi and IPTV can be layered. "
This is a very nascent market, and, as such, there is a pressing need
for some standardization, or "at least a common recognition of what a
femtocell's minimum requirements should be," said Carlaw.
Global Relevance
This kind of technology will be useful not only in the U.S., but
overseas as well, where cellular phone companies are also encountering
competition from WiFi.
Singapore is launching a nationwide WiFi network that will let users
receive a network connection to the Internet. "At the end of the year,
Singapore will be one mega-hotspot," said Bill Chang, the CEO of
SingTel, the telecom Quintum VoIP solutions. The perfect fit for your
Enterprise. company launching the new network.
Last year, Singapore began its "Intelligent Nation" program, aimed at
turning the country into one of the world's leading technology-focused
nations. Singapore is focused on becoming a leader in communications
technology, and the island nation is well on its way to becoming an
international case study. The mega WiFi network there will be based on
WiMax, which is a high-speed, reliable and robust wireless standard
being pushed by Intel (Nasdaq: INTC) Latest News about Intel and other
companies.
Singapore already has a nationwide WiFi network setup, and for every
square kilometer of the country, there is one public hotspot.
Similar projects within the U.S., and other projects worldwide are
emerging as well, posing a threat to wireless carriers. For example,
Google (Nasdaq: GOOG) Latest News about Google is launching a city-wide
wireless network in the San Francisco Bay area. Another project is
nearing completion on the wireless network in the city of Mountain View,
Calif.
Old Technology Hanging In There
Though cellular carriers are threatened by the new WiFi technology, that
does not mean that they have given up their own expansion plans.
The association representing the European-developed GSM mobile phone
standard, 3G Latest News about 3G Americas, last week said that nearly
100 million new subscribers signed up for GSM technology in the Americas
in the past year.
Research firm Informa Telecoms & Media recently reported that 2 billion
of the world's 2.41 billion cellular subscribers were using GSM, and 3G
Americas expects heavy GSM growth in Latin America and the Caribbean to
continue.
"Brazil alone added 21 million new GSM customers in the year ending June
2006," said Erasmo Rojas, 3G Americas' director of Latin America and
Caribbean. "CDMA technology growth is losing its momentum in Brazil and
across the Americas region."
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